Digital Markets Act: EU targets US tech giants' cloud power

Amazon Web Services (AWS), Microsoft's Azure, and Alphabet's Google Cloud services could face restrictions under the European Union's (EU) Digital Markets Act (DMA). This was reported by the news agency Bloomberg on Monday, citing sources familiar with the matter who wished to remain anonymous.

According to the report, European antitrust authorities are preparing to investigate the market power of these platforms to decide whether they should be subject to stricter regulations. The move follows several major outages in the cloud industry that have caused significant service disruptions worldwide and highlighted the risks of relying on just a handful of providers, as Bloomberg writes.

A month ago, an approximately 15-hour outage of the AWS cloud occurred at one of AWS's core locations in the United States. Hundreds of companies were affected. Amazon's own streaming services, Atlassian, Docker, the Epic Game Launcher, and the messaging service Signal were inaccessible or only very limitedly accessible due to the outage. A week later, Microsoft Azure also struggled with an outage. This led to flight passengers being unable to check in and votes in the Scottish Parliament being interrupted. In June, Google Cloud and Cloudflare faced disruptions in the USA, affecting numerous internet services.

Cloud providers excluded from DMA so far

The major cloud providers, primarily from the US, have so far evaded the EU's Digital Markets Act, as a large portion of their business is handled through enterprise contracts. This makes it difficult, according to Bloomberg, to determine the number of individual users. However, this is one of the EU's most important criteria for determining a company's market power.

The Digital Markets Act (DMA) has been in effect since November 2022 and aims to set limits on the market power of so-called gatekeepers like Google, Amazon, or Apple, and to make competition fairer. According to the EU regulation, companies that offer central platform services and have a sustained significant influence on the EU's internal market are classified as gatekeepers.

According to Bloomberg, EU regulators will examine as part of the targeted investigation whether the leading cloud providers should be obligated to a series of new requirements regarding interoperability and data portability. Significant fines could also be imposed if it is determined that the cloud services violate existing regulations, the report adds. So far, US tech giants Apple and Meta have been fined by the EU for violations of the Digital Markets Act, with penalties amounting to several hundred million euros.

(akn)